French tycoon Patrick Drahi’s Altice tops up stake in BT to 18 per cent for £1bn
Patrick Drahi’s Altice increased its stake in telecoms giant BT this morning from 12.1 per cent to 18 per cent, disappointing eager traders who were banking on an imminent French takeover.
The tycoon reiterated reports that he wasn’t looking for a hostile grab and backed the current management; Drahi said he holds the BT management in “high regard” and was “fully supportive of their strategy”, including the full-fibre broadband roll out.
However, shares in BT plummeted to the bottom of the FTSE 100, down more than five per cent following the news.
Neil Wilson, from Markets.com said of the investor reaction: “I can’t imagine the government would allow BT to be taken over and I think investors are paying close attention to the immediate and very defensive response from the government.”
Indeed, the Government said it was monitoring the situation closely and would not hesitate to act if required, with Digital Secretary Nadine Dorries meeting with BT this week to discuss.
BT is in the middle of a $20bn transformational programme to build a national fibre network, a strategy crucial both to the company and the government, which is looking to boost regional growth levels.
“The government is committed to levelling up the country through digital infrastructure, and will not hesitate to act if required to protect our critical national telecoms infrastructure,” a spokesman said.
Today’s announcement may have also shaken investors as it means that Drahi is precluded from taking over the company for a further six months in a new lock-up period: a move that “seems to have provoked consternation in the market”, said AJ Bell investment director Russ Mould.
However, analysts at Jefferies reiterated that BT was a ‘Buy’ stock, recognising that Altice’s increased stake underlines ongoing intent: upping its target price from 174.85p to 260p.
Shares were down nearly five per cent at close to 166.75p.
Drahi is said to be worth £9bn, with his fortune made in the telecoms sector. He also bought the Sotheby’s auction house in 2019.